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Announcements

 

CSF Group plc
(“CSF” or the “Company”)
 
Trading Update and Strategic Review
 

CSF Group plc (AIM: CSFG), a leading provider of data centre facilities and services in South East Asia and the largest provider of data centre services in Malaysia, today announces a trading update ahead of its financial year end of 31st March 2013.

During the course of the financial year the Company achieved full occupancy in CX1, CX2, CX3 and Block A of CX5. The Board can confirm it therefore expects reported revenue and profit before tax, before any adjustments that may be required from the events described below, for the year ending 31st March 2013 to be in line with market expectations.

The revenue to be reported for the year ended 31st March 2013, c.RM33m (£7.1m*) relates to two key tenants in Block A of CX5 and CX2. These two key tenants have approached the Group to settle the amounts owed during the financial year ending 31st March 2013 over an extended period of time and negotiate early breaks. The Directors believe that revenue and profits associated with these tenants in its financial statements for the financial year ending 31st March 2013 will most likely have to be provided for in full and will lead to a significant reduction in the Company’s profit expectations for the financial year ending 31st March 2013 and the following year.

The Board’s focus on securing tenants its data centre facilities, especially following the issues with the two key tenants highlighted, has led to a decision being made to suspend the development of CX Singapore. The Board also has yet to start recognising development revenue for CX6 as it awaits customer approval of the Company’s revised proposal as announced in October 2012. The decision to suspend the development of CX Singapore and the delay in work on CX6 will lead to a significant reduction in the design and development revenue of the Company going forward.

A number of proposals have been submitted to potential customers for CX5 and the Company continues to enhance its pipeline of data centre customers. The Company’s investment in Indonesia is progressing in line with expectations, with ten customers operating out of CX Jakarta already, backed by a pipeline of customers including several financial institutions.

The Company expects to have cash reserves at the financial year end of RM68.0m (£14.5m*), slightly higher than previous guidance given by the Company due to working capital investments not being required in CX Singapore and CX6.


Following the developments set out above and guidance provided by the Company’s non-executive directors, the Board has agreed to undertake a full strategic review of the Company. In line with this, the Company expects to appoint independent advisors, with experience in South East Asia, to review all options open to the Company in maximising shareholders’ value. The Company will inform Shareholders of the appointment of advisors and the expected timeframe of the strategic review in due course.


*    The pro forma balances in pounds Sterling are included solely for convenience. The pro forma balances in pounds Sterling are stated, as a matter of arithmetical computation only, on the basis of all current and prior year balances being translated from Malaysian Ringgits into pounds Sterling at the rate prevailing on 26 March 2013 of RM4.6984 : £1.00.  This translation should not be construed as meaning that the Malaysian Ringgit amounts actually represent, have been, or could be converted into the stated number of pounds Sterling.

For further information:
 
CSF Group
Adrian Yong, Chief Executive Officer
 
+603 8318 1313
 
Cenkos Securities (Nominated Adviser & Broker)
Ian Soanes or Bobbie Hilliam
 
+44 (0)20 7397 8900
Buchanan
Jeremy Garcia / Gabriella Clinkard
+44 (0)20 7466 5000